Real estate investors -just like every business owner- need to track their income and expenses so that they can accurately file taxes and maximize their profits. The stakes are real: inaccurate books can lead to overpaying taxes and making decisions based on flawed data. 

Most small business owners use some form of accounting software to help them categorize transactions, monitor cash flows, and stay in control of their finances.

Real estate investors nationwide choose different strategies to help them manage their financial records.  Those with very small portfolios often do it themselves with spreadsheets.  Those with very large portfolios may outsource the job entirely or employ a bookkeeper on staff.  Investment property owners of all sizes also turn to accounting software to help them stay in control and maximize efficiency. 

This article is to help you figure out if using accounting software is the right fit for you and your real estate portfolio.

First, let’s take a look at some of the advantages that using generic small business accounting software can bring to your real estate investments.

• Time savings

One of the core benefits accounting software of all kinds offers is the ability to link to your real estate business bank account and import a transaction feed.  It is a safe and secure way to drastically reduce the amount of manual data entry you need to do, saving you lots of time.

• Increased accuracy

Beyond efficiency, working off an imported transaction feed also increases the accuracy of your books because you are much more likely to account for all of your transactions and expenses.  If you are not claiming all expenses, you are likely overpaying taxes.

• Organized, cloud-based receipt storage

Accounting software provides a framework that helps you keep your data organized, accessible, and easily communicable.  In addition, almost all modern accounting software is cloud based and allows you to link and store digital copies of receipts.  Not having to physically keep your receipts or use a separate system to manage them helps keep your financial management simple. 

As you can see, general small business accounting software can be a very useful tool.  Accounting software made specifically for real estate and rentals, such as REI Hub, can be even more beneficial. 

Most accounting tools available today are built with a one-size-fits-all philosophy.  That makes sense for traditional small businesses like retail, but can present problems for unique industries like real estate.  While most accounting softwares can be tweaked to work with investment property, it is not always seamless. Dedicated real estate accounting software is designed to optimize your experience and provide industry specific value.  Benefits include:

• Already set up for real estate and rentals
  

Real estate accounting software is ready to go for rentals and investment properties out of the box.  You don't need to change the chart of accounts, figure out how to track by property, or navigate endless accounting jargon.  Instead, you can simply add your properties (and call them properties!), add your accounts, and get on with keeping your books. 

• Easy to use and optimized for your needs
  

Real estate accounting software won't help you track inventory or manage payroll, but it will properly split your mortgage payment and print Schedule E reports.  With a property centric interface and rental transaction templates, real estate bookkeeping software is easier to use and understand, especially for real estate investors without much accounting experience. 

• Integrated rental organizational tools

If you fit in one of the following groups, odds are that accounting software would streamline your real estate financial management and make your life easier.

• You are unhappy with your current bookkeeping
  

• You want to spend as little time as possible on bookkeeping